Postal Services Bill

Lord Myners Excerpts

Tuesday 8th March 2011 Lords Chamber

[Lord Brooke of Alverthorpe]

I, too, support the amendment and agree with the line taken by the noble Lord, Lord Cotter. As the Minister knows I was a partnership director of NATS, where, when the PPP was created, 5 per cent of the shares were allocated to the employees. I acted as the director responsible for that element of the share distribution and had conversations with the staff about it. However, it was not entirely satisfactory; I was still at a distance from them because I was also involved in the management side of the business. While anyone who went on to a board would have to be involved in the management side too, if the Government were to accept the amendment there would certainly be someone there who was better able to speak directly for the feelings of the workforce than someone doing so one removed, in the way that I did.

I have been to a number of meetings recently at which coalition government Ministers have spoken about employee ownership and share involvement and extending it over a wider front. Many have spoken about providing greater opportunities for the workforce to be more directly involved with management of companies, particularly where they have a stake in the shares.

The amendment presents a modest proposal—I would have preferred it to suggest that two places should be allocated—but I am reasonably content today to go along with opening the door through one seat being made available for the employees. I hope there will now be an opportunity for the Minister to display, not only to her noble friend Lord Cotter but to a variety of Ministers who have spoken recently on this at meetings, that extending employee ownership will be put into practice when the opportunity is immediately before the Government.

[Lord Myners]

My Lords, I add my support to the amendment and endorse the views expressed by my noble friend Lord Brooke and the noble Lord, Lord Cotter, on the Liberal Democrat Benches.

There are two issues involved here. First, in a conventional private sector situation where another company or body of investors has a large shareholding, it is quite customary for it to seek board representation, recognising that when it sits on the board it shares the responsibilities of other directors to the company as a unitary board. I note the presence of the noble Lord, Lord St John of Fawsley, in his place on the government Benches and it immediately reminds me that News International, as a particularly large shareholder, has always had its interests represented on the board of BSkyB. It is entirely logical and consistent with good private sector practice for the workers in the Post Office to have such representation on the board of directors until such time as they cease to be significant shareholders.

However, on my second point, I have regard to the fact that the Minister not only brings considerable business experience to her position but also speaks on issues of corporate governance. There is a bigger issue at heart here: the shareholders in a privatised Post Office—whether it is a large corporation, perhaps based overseas, or is floated on the stock market with a large number of investors—will nevertheless individually have a very modest interest in the company. If it is bought by a Dutch company and that company is floated, the ultimate shareholders will be institutions spread across the world, few of whom will own more than 1 per cent of the company; they will have diversified their risk through portfolio construction. The employees cannot do that; they will have what investors would call a high-conviction portfolio, with all their money invested in a single share and all their employment in one place of work. It is surely right that people who exhibit such a high conviction to a company should have some voice in the leadership and management of the business. Some of the malfunctioning of companies over recent years might not have happened had there been a voice around the board table reflecting the views, knowledge and insights of the employees of the company, as opposed to executives who sit in executive suites at the top of the tower building or non-executives who turn up for two or three hours a month. There is a broader issue here and I hope that the Minister, given her responsibilities for corporate governance, will speak to that broader issue in addition to giving us some welcoming encouragement on this amendment.

[Lord Hoyle]

I agree with those who have spoken in support of the amendment, and particularly with the comments of my noble friend Lord Myners. Although some people can walk away from a company if it is not successful, those who are employed there cannot; it is their—and their family’s—livelihood. I know that the Minister will take into account all that we have said when making her reply, and I hope that it will be a positive and constructive reply. I agree with my noble friend Lord Brooke that one representative is a modest request. I would have asked for at least two—but here we are, with a suggestion that everyone who has spoken agrees is both modest and important.

I am glad that it is recognised that employees matter. Speaking of his own, small company, the noble Lord, Lord Cotter, said that he tried wherever possible to take his staff with him. If staff feel that the company they work for is being sold from underneath them, they can have no loyalty to the new group that comes in. Staff have to be won over, and is there a better way of doing that than by making them part of the decision-making? As employees of the company, they will be able to reflect back. Rather than having somebody external—who could do a job for the employers, as my noble friend Lord Brooke said—would it not be better to have these staff representing the company so that they could take the views at the highest level on why certain decisions are being made to achieve what one hopes will be their future prosperity? I totally agree, and repeat again, that this is a modest suggestion.

--- Later in debate ---

[Lord Myners]

The Minister started her answer by saying that as things were as they are, and there was no good reason for changing that, they should remain as they are. Surely, however, the Government are making changes, and that is the appropriate trigger for consideration of this factor. From these Benches we are urging that it is essential that the workers in this company, which has always been a very delicate organisation, who have served it loyally over many decades, are entitled to believe—almost as part of the concept of the “big society”—that the Government recognise that there is a degree of mutualisation. After all, that is why the Government are gifting shares to the workforce. So why go only halfway? Why stop at the point of gifting shares and not empower those shareholders to give voice and expression around the board table?

[Baroness Wilcox]

I can only repeat that, as we all know, the previous Bill failed. We hope that this Bill will succeed. We want as much flexibility as possible when it comes to selling Royal Mail. We have faith in the fact that the people who have worked for this company for so long should be offered the best possible opportunity. We are offering the biggest ever issue of shares to the employees of the company—over 10 per cent. That is a wonderful voice that they will have. No one is saying that no one will finish up on the board. We are saying that we cannot put this in legislation. We need to keep this as flexible as possible to get the best possible price and the best possible deal. The noble Lord, Lord Myners, of all people, City man that he is, knows what I am talking about. I ask that the noble Lord, Lord Young, withdraw his amendment.